Kansas City Star to sell building, move printing to Des Moines

WTF?

 

I saw the post for the Wichita Eagle having a base rate for subscribers of approximately $1,000 a year also. I went to the website and I was offered a subscription for about $20 a month for 12 weeks, which was described as 80% off the base rate. So I guess they are popping long-time subscribers $100 a month. For a six day a week product that I bet is pretty thin most days.

 

One of my most memorable moments at Gannett was when some regional circulation hack came in and explained our new pricing policy, where virtually every subscriber would pay a different price for the same subscription plans.

He explained how the people who had been with us the longest would pay the most. When he was questioned why, he said without any shame that their analysis shows the more loyal (and older) the customers were, the less likely they would cancel because of a price increase.

So those were the people they targeted for the price-gouging.

 

I want to acknowledge the accuracy of your post, Burns, but can't bring myself to hit the "like" button for a policy that disgusting.

That's what newspapers have been doing for a long time, though .... chasing after whatever desperate strategy comes along, while crapping all over their most loyal customers.

 

I know it’s easy to pile onto newspapers, but isn’t this a strategy that’s shared by many? I see new-customer rates on ads that I know I’m not getting with various companies. My cable bill recently went up. When I complained about it and asked for a better rate, the customer service rep told me straight up that the price I had was meant to lure me in and now the company hopes that I appreciate and need their product enough to not cancel.

 

That truly is disgusting and example No. 1000 why this is the worst business a person EVER could enter. To charge the most loyal customer the most money is fricking disgraceful. Some of you suits tell me I'm wrong. Geez I'm mad reading this.

 

As PaperClip said, this is nothing new.

I've been a DirecTV subscriber for 22 years. Not once have I been offered a free month, a free period of HBO, a free period of upgraded programming, a break here or there. Not once have I received a letter that said, "Thank you for being a loyal subscriber! As a reward for your many years of service we are giving you . . . at no charge!"

All good rates/free shit go to new subscribers. The only thing they ever gave me was a new $14 remote. And that was after I basically told them, "Listen, I've been with you since 1998 and have never been offered a damn thing."

 

I think there is a difference between that - an intro rate for a couple of months or years to hook you - vs. the tactic described by Burns, which seems to be intentional price gouging. Also, although it can be fine print, cable companies are typically forced to disclose what the price is outside of the promotional period.

 

I recently upgraded my internet from 100mbps to 200 (I'm typically getting 233 now). Price went down from $90/month to $75. Was supposed to go up by $4. Have no idea if I'm getting some kind of temporary promotional rate.

 

$90/month for 100 Mbps is robbery. We have gigabit out here that’s cheaper after the promo.

 

My mom still subscribes to the Boston papers:
$75/month for the Globe
$85/month for the Herald

Now I love the Herald and the people still there, but there is no way that’s defensible. The Herald today is about the size of its sports sections 20 years ago.

Mom has the money and I feel guilty about telling her that she should pull the plug and stop supporting my old industry. She enjoys getting the papers every day. But it’s not worth it.

 

Poynter:

When The Kansas City Star unveiled new presses in 2006, it was an event with only a bit less pomp than cracking a champagne bottle on a ship’s hull.

Four years in the making, the four-press unit, new and state-of-the-art, was enclosed in an eight-story glass “pavilion” covering two downtown city blocks with office space for 400. Total cost: $200 million.

Reeling ahead 15 years, you may have guessed how this movie ends. The Star announced Nov. 10 that it will vacate the building and no longer use the presses. Both had been sold to a wealthy local family’s real estate company for $30 million then leased back by the Star. Possible uses include a telemarketing center and eventual bulldozing for a new downtown baseball stadium. …​

As for the future of those presses … I spoke with Rosana Privitera Biondo, president of Mark One Electric (founded by her parents) and principal in Ambassador Hospitality.

She told me she had hoped that McClatchy would sign a new contract and continue printing there. “They told me that the Star was their most profitable and best paper … but I couldn’t get them to do it.”

In better times, used presses could be sold, disassembled then shipped by boat to publishers in Latin America or the Far East. Biondo said she has engaged the company that installed it in 2006. Because the press is in mint condition, selling it whole is a possibility.

Or maybe the press can stay put and be repurposed for printing paper bags or other products, she said.

There are also a variety of uses for the building, Biondo said, but the winddown of the Star’s presence for her and other civic leaders is “a very heartfelt problem for the community.”​

They addressed the rising print subscription costs, too.

Part of the math is pretty simple. As construction of the production plant was being started, according to a 2002 Editor & Publisher article, the Star’s daily print circulation stood at 266,000 daily and 380,000 Sunday. Now those figures have fallen to 46,000 daily and 66,000 Sunday (with another 37,000 paid digital subscriptions). That’s more than an 80% decline.

Of course, the number of sections and pages are much reduced, too. So the Star does not generate nearly the work to keep the jumbo press complex humming.

In less dramatic fashion, this scenario has been playing out across the industry for years — a trend accelerating quickly with the ownership consolidations and advertising reverses of 2020. …

I view the shift to remote printing at the Star and elsewhere as a maker of where digital transformation is headed. As I reported in October 2018, the Star is charging some subscribers about $850 a year for renewals, all but pushing print loyalists out to a digital alternative or getting their local news instead from TV, social media or other sources.​

From that linked article, first published in October 2018:

At the Star and 29 other McClatchy papers, longtime core subscribers, especially in higher income ZIP codes, are being hit with big renewal rate increases.

Some will cancel, the theory goes, but many will shrug and send in a check. So the practice works out to a net revenue gain for the company.

Rewarding your best customers with a higher rate than everyone else's seems a dubious consumer relations strategy, especially for an industry now focused on wooing audience revenue support as print advertising quickly erodes.

Dan Schaub, corporate director of audience development at McClatchy, declined through a spokesperson repeated requests for an interview. But he did offer a brief email comment:

"We market different discounts and offers to our customers to incentivize them to become subscribers….Over time, and as our subscribers engage more deeply with our content and come to rely on the local journalism that we produce that is essential to them, subscription fees are raised incrementally towards what we calculate as a fair market value."
​

Which I take to be a confirmation of the practice.​

I would have thought they’d be increasing print subscription fees to push people away from the resource-hog print product, but apparently not. It seems to be something that started at McClatchy.

A long history of renewing and being in a prosperous ZIP code along with other variables like remote geography or method of payment may go into the equation that identifies households for the highest rates. He added that the system was developed in consultation with Mather Economics, an industry leader on circulation pricing, both digital and print.

I spoke with Matt Lindsay, Mather's president, who said that he could not discuss individual clients, but confirmed that at least some are pursuing top rates for some customers but not others.

American circulation prices, which hovered at a giveaway 25 cents a day in the 1990s, are finally catching up with what is charged in the rest of the world, Lindsay said. Still, the big increases may create some sticker shock.

"A lot more consideration and strategy is going into portfolio management," Lindsay said. "There are core, predictable subscribers," who are likely to renew even in the face of a big increase, he continued.

A recurring theme in his work, Lindsay said, is that "consumers like the products, and there is a willingness to pay … We are moving away from one-size-fits-all" pricing.​

And how’s this going with the customers? Well ...

I do not have enough information to say that the $846 rate is universal at McClatchy papers. That price conceivably could have been experimental and subject to change.

But the practice isn't isolated to suburban Kansas City. A dissatisfied reader in Columbia, South Carolina, where McClatchy publishes The State, wrote me that there is progressively less and less local news in the paper but that the rates still are increasing every year.

He asked not to be quoted by name but emailed,

I am attaching a photo I took of today's State newspaper which clearly states the subscription rate is $25 per week. What makes it worse is the response I got from a letter that I sent the publisher asking what the actual subscription rate was. His assistant wrote me that WAS the rate and that the only way I could get another quote was to phone The State asking for a subscription.

We get 3-month renewals mailed to us with a rate of more than $100. Then we have to call the newspaper to wheedle our way down. I got mine down to $80 something for 3 months. My neighbor scored with a $66 rate. Frankly, it's a hell of a way to run a railroad.
​

Reader (Rob) Black in Kansas City experienced a variation on negotiating a better rate. A couple of months after he declined to pay the $846, a representative of the Star called and asked if he would consider coming back.

The offer was three months at 50 cents a day or six months at $1.25 a day. Black declined, fearing that the rates would jump right back up. Finally he suggested 75 cents a day for a year, Black said, which works out to $262.50. The salesperson agreed to that, and home delivery has resumed.

But Black remains watchful for higher prices to come and is not nearly as loyal a reader as he used to be.

After letting the subscription lapse, he and his wife adjusted fairly quickly to not having a paper to read with their morning coffee. "It"s like smoking cigarettes," Baker told me. "You miss it until the addiction is over.”​

I’m gonna say that’s not how you want your best customers talking about you. I might be wrong about that.

But I kind of doubt it.